Advantages of Regulatory Compliance Consulting for Banks

Banks and other financial institutions are subject to strict regulatory oversight, with a number of independent and government-based organizations establishing laws and regulations that affect nearly every aspect of daily operations. 

Achieving and maintaining regulatory compliance is a major lift in the financial sector, with banks required to closely evaluate and monitor their practices, policies, and procedures in a way that aligns with these regulations. Doing this in an effective manner is a challenge, which has many turning to regulatory compliance consulting. There are many advantages to working with regulatory compliance consulting companies, making this one investment that banks and other financial institutions should seriously consider. 

What Happens if a Bank is Non-Compliance With Regulations? 

Regulatory non-compliance can carry some serious fines, penalties, and other adverse consequences. Regulatory organizations have the ability to impose significant monetary fines totaling hundreds of thousands of dollars or more. 

A financial institution may also be subject to penalties, such as a change in standing with an organization or exclusion from an organization and all organization-hosted events for a period of time — or even permanently. These penalties not only harm the bank in a practical sense; they’re also harmful to the bank’s image. 

Public image and perception matter significantly for a bank. Bad press can also arise as a result of regulatory non-compliance, leading to account closures and a dip in business that may be impossible to recover from. 

Helping Banks Maintain a Sense of Trust With Clients

There’s also the matter of public image and trust. Few business types rely upon a positive public image and trust more than a bank. Even the slightest bit of bad press can have a dramatically negative impact on a financial institution and its ability to remain in business. 

Stated simply, clients need to feel that a bank is trustworthy and reputable. Regulatory non-compliance or worse, allegations of illegal activity, can destroy a bank’s reputation in very short order. Even something such as a data breach can lead to bad press that even the most talented public relations firm cannot effectively remedy. 

This underscores the importance of working with a regulatory compliance consulting firm that can help a bank to implement measures that reduce the risk of non-compliance and other threats to integrity (both perceived and actual.)

Evaluating a Bank’s Practices, Policies and Procedures

Regulatory compliance consulting is very effective when it comes to the evaluation of a bank’s practices, policies, and procedures. Generally, regulatory organizations require banks to implement and maintain the industry’s best practices — whether it involves data management, client relations, record-keeping practices, client communication methods, financial consulting techniques, or another aspect of a bank’s business practices. Therefore, by becoming compliant, the bank is simultaneously implementing industry best practices. 

A regulatory compliance consultant will be familiar with all of the practices, policies and procedures that are required to be compliant with the many regulatory requirements that banks face. But evaluating your own financial institution in an effective manner can be challenging, if not impossible. This is why it is beneficial to have an objective, third party who can evaluate the bank and offer recommendations for improvement.

By assessing a bank’s operations relative to the standards and regulations that have been put in place by a regulatory body, the consultant is ensuring that the bank is doing business in a way that brings maximum benefit. This is true in terms of regulatory compliance, client experience, and operationally. 

Planning Changes to Achieve Regulatory Compliance

Once problem areas are identified, a regulatory compliance consulting firm will make recommendations for resolving the bank’s areas of non-compliance. But without a well-architected plan in place, effectively implementing those new measures or changes can turn into an extreme challenge. Enter: your compliance consultant. 

Planning is one of the major advantages of working with a regulatory compliance consultant. They can develop a step–by-step action plan for resolving issues of non-compliance, helping guide the bank’s staff as they change the way they operate with new policies, procedures and processes.

Offering Guidance for Maintaining Regulatory Compliance Long Term

In addition to developing an action plan and guiding the financial institution as they strive to put that plan to work and effect change, the consultant can also offer advice for monitoring and maintaining regulatory compliance over the long term. 

Periodic reviews are vital for a financial institution that wishes to be compliant with the many regulatory requirements that are in place. Otherwise, the bank could find itself in a place where complaint-friendly processes gradually evolve and fade away, leaving the institution vulnerable to fines, penalties, and other adverse consequences that may arise from non-compliance. 

A bank’s compliance consultant will develop a process for evaluating specific practices and processes on a periodic basis to determine if the bank is maintaining compliance.

Implementing Risk Management Software Solutions

Regulatory compliance is a key component of a bank’s risk management strategy and as such, financial institutions can often benefit from the deployment of a risk management software platform. These software platforms are very effective in helping with regulatory compliance self-assessments and long-term monitoring. 

Risk management software also usually includes project management-type features that allow a bank to establish an action plan, collaborate on that plan and monitor progress toward specific goals.  

A bank’s regulatory compliance consultant can offer guidance on the selection, implementation, and deployment of a risk management software solution — one that has tools and features that will bring the greatest benefit and ROI to the financial institution. 

The right technology can bring great results for a bank that is seeking to achieve and maintain regulatory compliance. The team at iTech specializes in all aspects of risk management technology, including custom software solutions. We develop innovative enterprise risk management platforms, from governance, risk and compliance (GRC) software to more specialized platforms that are suitable for the financial sector and many others. Contact iTech today to discuss your bank’s regulatory compliance needs and how we can develop a custom risk management solution to help you achieve and maintain the regulatory compliance that you need to succeed.